Motor Finance Discretionary Commission Redress

What the scheme covers

Between roughly 2007 and early 2021, most UK car finance was sold with what the industry called a Discretionary Commission Arrangement, or DCA. The dealer setting up your loan could choose your interest rate within a band, and the higher the rate the bigger their commission. The arrangement was rarely explained to customers.

The FCA banned DCAs in January 2021. In October 2024 the Court of Appeal ruled (in Johnson v FirstRand Bank, Wrench v FirstRand Bank, Hopcraft v Close Brothers) that any commission paid by a lender to a dealer that was not adequately disclosed to the customer was unlawful. The Supreme Court clarified the framework in July 2025. Following all of that, the FCA published Policy Statement PS26/3 confirming a consumer redress scheme that opens on 30 June 2026.

Who qualifies

Three things need to be true:

1. You took out a regulated motor finance agreement (PCP, HP, or conditional sale) on a car, van, motorbike, or motorhome.
2. The agreement started between 6 April 2007 and 27 January 2021, the FCA's full DCA window.
3. The arrangement involved either a discretionary commission to the dealer (most pre-2021 agreements did) or a non-disclosed commission of any kind.

You do not need to prove the third condition yourself. The FCA's scheme puts the burden on the lender to identify which agreements were affected and to contact you. You just need to be findable.

How much you might get

The FCA's published estimate is an average of £829 per affected agreement, drawn from a pot of around £7.5 billion. Your specific number depends on the size of the loan, the rate you actually paid, the rate you would have paid without the discretionary uplift, and the term of the agreement.

If you had multiple finance agreements over the period (a new car every three years on a PCP, for example), each one is assessed separately. Households with three or four agreements in the window can see total redress in the £2,000 to £4,000 range.

How to claim it yourself

From 30 June 2026 the lender-led process is straightforward:

1. Lenders write to affected customers with the calculation and a redress offer. You should receive a letter or email by post, or via your online lender account.
2. You compare the offer to your records (the original agreement if you have it, or the data you can request via a Subject Access Request).
3. You accept, ask questions, or reject. If you reject, you can escalate to the Financial Ombudsman free of charge.
4. Accepted payments arrive by bank transfer, typically within eight weeks of acceptance.

The official starting point for the scheme is fca.org.uk/consumers/car-finance-complaints. That page is the canonical place to check if you are unsure whether your lender is in scope or what stage they are at.

What you can do before 30 June 2026

Three useful actions you can take now:

• Make sure your lender has your current address. The whole scheme runs on lenders contacting customers. If you have moved house since the agreement, log into the lender's online account or call them with the update.
• Lodge a holding complaint. Send the lender a short complaint under DISP 1 saying you believe a discretionary commission arrangement applied to your agreement and you would like the matter assessed. Most lenders are pausing responses pending the scheme; the complaint preserves your position.
• Gather your records. The original agreement (often in a glovebox folder) plus bank statements showing monthly payments. If you do not have them, send a free Subject Access Request to the lender; they have one month to respond.

A note on claims management firms

The Financial Conduct Authority itself has been unusually explicit on this point. The redress scheme is set up so the lender does the work and contacts you. Engaging a CMC is legitimate but rarely worth it.

The traps people fall into

• Assuming personal loans count. A bank loan you used to buy a car is not motor finance and is outside the scheme. Only PCP, HP, and conditional sale agreements qualify.
• Worrying about the dealer's role. The dealer you bought the car from may be long gone. The scheme works off the lender's records, not the dealer's.
• Signing up to multiple CMCs. Some firms send marketing that looks like an FCA letter. If you have already appointed a CMC, the lender may withhold the offer pending the CMC processing it, slowing things down.
• Missing the boundary date. Agreements that started 28 January 2021 onwards are not in this scheme. The FCA's ban took effect that day.
• Treating the offer as final. If the calculation does not match what you would expect, you have a right to ask the lender to explain it and to escalate to the Financial Ombudsman if you are not satisfied. The FOS service is free.

How Untap helps

Talk to Nell, our voice agent, and she runs the basic eligibility test against your finance history. If you upload an agreement, our extractor pulls out the lender, dates, and rate so you can keep a clean record before the scheme opens. We do not file the complaint or accept the offer for you, and we never take a percentage. The FCA built the scheme to be free; we are not going to mess with that.

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